China and emerging Asia: comrades or competitors?
AbstractDo increases in China's exports reduce exports of other emerging Asian economies? We find that correlations between Chinese export growth and that of other emerging Asian economies are actually positive (though usually not significant), even after controlling for trading-partner income growth and real effective exchange rates. We also present results from a VAR estimation of aggregate trade equations on the relative importance of foreign income and exchange rates in determining Asian export growth. Although exchange rates do matter for export performance, the income growth of trading partners matters even more. In addition, we examine specific products and find evidence that a considerable shifting of trade patterns is taking place, consistent with a 'flying geese' pattern in which China and ASEAN-4 move into the product space vacated by the NIEs. Our results suggest that China and emerging Asia are both comrades (overall) and competitors (in specific products).
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Bibliographic InfoPaper provided by Board of Governors of the Federal Reserve System (U.S.) in its series International Finance Discussion Papers with number 789.
Date of creation: 2003
Date of revision:
Other versions of this item:
- NEP-ALL-2004-01-18 (All new papers)
- NEP-DEV-2004-01-18 (Development)
- NEP-IFN-2004-01-18 (International Finance)
- NEP-MAC-2004-01-18 (Macroeconomics)
- NEP-SEA-2004-01-18 (South East Asia)
- NEP-TRA-2004-01-18 (Transition Economics)
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- John Fernald & Prakash Loungani, 2004. "Comrades or competitors? on trade relationships between China and emerging Asia," Chicago Fed Letter, Federal Reserve Bank of Chicago, issue Mar.
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